James Murdoch on Cord-Cutting, ‘Fault in Our Stars’ and ‘Simpsons’ Syndication

From “The Simpsons” to cricket, the 21st Century Fox co-chief operating officer stressed that the entertainment conglomerate is concentrating on brands that have international appeal at a time when the media business is becoming more fractured. This kind of programming provides a ballast against the streaming services and online platforms that are luring audiences away from cable, broadcast television and movie theaters, an animated Murdoch argued during a question and answer session at the Sanford C. Bernstein Strategic Decisions Conference on Wednesday.

“We are in an environment of really extreme plurality for customers … you have to have things that are differentiated,” Murdoch said.

“There’s no question there’s a lot more competition downstream, be it from Netflix or Amazon Prime,” he added.

To counterbalance those challenges and to appeal to a cadre of cord-cutters, 21st Century Fox has made a series of expensive investments in recent years, launching FXX and Fox Sports 1 to cater to what Murdoch described as “under-served” markets in sports and comedy. To bolster FXX’s programming portfolio, the company plunked down $750 million for the syndication rights to more than 500 episodes of “The Simpsons.”

“It’s an iconic property that we really felt we wanted to make a home for,” Murdoch said.

Yet there are some products that left 21st Century Fox with a sense of sticker shock. Last year, Fox Sports passed on the opportunity to continue broadcasting the Los Angeles Dodgers, giving Time Warner Cable the opportunity to swoop in and offer more than $7 billion for rights to air the team’s games for 25 years.

“The Dodgers deal we thought was too rich,” Murdoch said, noting that sports are not “something where you just write any-sized check.”

The Fox executive also spoke candidly about the mercurial nature of the film business, acknowledging that the studio arm of the company suffered a series of setbacks at the box office last year after films like “The Internship” and “The Counselor” landed with a thud.

The studio’s fortunes have improved of late, with films such as “The Grand Budapest Hotel,” “Rio 2″ and last weekend’s “X-Men: Days of Future Past” attracting audiences. Murdoch went on to predict that “The Fault in Our Stars,” a romantic drama involving a young woman with cancer, “has the potential to break out.” Pre-release tracking has the film opening to over $30 million next week, a spectacular result for a low-cost picture about a serious subject in a season dominated by would-be blockbusters.

“Over the next three-to-five years we see a lot of really attractive filmic product coming through,” Murdoch said, noting that the studio will release several sequels to “Avatar” in the coming years.

While streaming and mobile video may be upending old models of consumption, Murdoch said that these innovations present opportunities for content creators. Native advertising and other means of product hawking are still being fine-tuned, but could become an important revenue stream in the future, particularly when matched with high-quality content.

“The challenge for us is how do we monetize that video?” Murdoch said.